THE 2012 LONDON OLYMPICS AND ITS EFFECT ON THE SPONSOR COMPANIES' STOCK PRICES.
Document Type
Article
Publication Date
2020
Abstract
Will a global sporting event positively affect the market? Can sponsor companies expect an increase in their stock price? This study tests the semi-strong form market efficiency theory by analysing the stock prices of 16 selected companies that were official sponsors for the London 2012 Olympic Games. This study uses the risk-adjusted event study methodology to test the hypothesis that the risk adjusted return of the stock price of the sample of 16 sponsor companies is significantly positively affected by this type of information on the event date. The evidence shows that the firms experienced positive gains to their stock price leading up to the event date, and little movement days after, confirming the semi strong form market efficiency theory. This being that no investor should be able to gain abnormal returns by using past information, when adjusting for risk, since the market has already incorporated it into the price.
Recommended Citation
Farthing, L. J., Bacon, F. W. (2020). THE 2012 LONDON OLYMPICS AND ITS EFFECT ON THE SPONSOR COMPANIES’ STOCK PRICES. Journal of Business and Behavioral Sciences, 32(2), 33-41. www.asbbs.org/
